DGQ 24: What predictions did you have in the past that didn’t play out as you expected?

tarot, prediction

References and getting beneath the surface have always been fascinating to me. Because of my job, my interests, and my content, I meet a lot of GPs and founders. And when they’re in pitch mode, they will almost always tell you about how amazing they are and how amazing their product is. Truth is, they probably are amazing. But in our world where everyone is, no one is. So what’s more interesting to me is their level of self-awareness. For the purpose of this piece, this is mainly about GPs. And hopefully, in service of GPs and LPs investing in GPs.

When someone is pitching you, especially if it’s the first time you’re meeting with them, they will tell you about all the sunshine and rainbows. That they knew there was going to be a pot of gold at the end of the rainbow. With a leprechaun there exclaiming, “I told you so.” I get the psychology behind it. Who wants to buy a new/used car with a dent behind the seat of the shotgun, just hidden from plain sight? Who wants to buy a home where the last owner passed away in it? Or an apartment where the family living above has rowdy kids?

For better or worse, usually for the worse, all of the above salespeople are looking for buyers, not customers. Customers are repeat purchasers; buyers are not. On the flip side, your LPs are more likely to be repeat purchasers. Customers. Specifically, the institutional LPs are looking for 20-year relationships. That’s 3-4 funds. Both Chris Douvos and Raida Daouk have independently shared with me that the average venture fund lasts twice as long as the average American marriage. So you need to know as much as you can get your hands on before you “marry” your LPs. And as such, LPs want to know both what worked and what didn’t. Or at least I do.

Usually, investors usually tell me all the predictions they had that worked out. “We were investing in AI back in 2019 before it became big.” To be fair, so were most other investors. “I knew cryptocurrency was going to be huge back in 2015.” And so on. As an LP, it’s hard to tell what is revisionist’s history and what isn’t. But what is helpful is to know if you had any predictions in the past that didn’t work out.

Why did you hold those beliefs so strongly? What were the factors that led you to that prediction? What did you learn after your prediction proved otherwise?

Venture is still very much a cottage industry. Why? No matter how big funds get. No matter how large deals become. And no matter how many rounds new names for the very first round of funding there are. Series A. Seed. Pre-seed. Angel round. You name it. The definition of venture is betting on the non-obvious before it becomes obvious. You will be wrong more often than you’re right. At the very end of the day, it is an art form. Not because it needs to be, but because very few have actually tried to break down the art form into a science.

Why? Science and strategy require games where the feedback loops are often AND where there are predictable, deterministic outcomes. If you input A in, you get B out. Venture is not that. You can do everything “by the book” and still fail. Although the book itself has yet to really be written.

Yet the most repeatedly successful firms (that have been able to transition leadership successfully to at least one other generation) are sommeliers of succession planning. How they transition this generation’s knowledge to the next. It requires not just being brilliant, but being brilliant enough to be able to break down instinct and intuition as if it were a math formula. If not classical physics, at least quantum.

All that to say, if I ask a GP to break down a prediction — whether it worked or didn’t — and they can’t answer it other than “I just knew,” I’m personally not sure if they’re ready to build a generational firm.

Photo by petr sidorov on Unsplash


The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.


Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!


The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.

The Art and Science of Reference Checks | Raida Daouk | Superclusters | S3E6

raida daouk

Raida Daouk started her career in banking before moving to the investment team of BY Venture Partner, a venture fund with offices in Beirut and Abu Dhabi. She quickly climbed the ranks within the company and ultimately became a Venture Partner.

Recognizing a void in the market for personalized venture consulting services, Raida established Amkan Advisory, a boutique consultancy firm specializing in assisting family offices and high-net-worth individuals in identifying venture funds that align with their specific strategies. Given that first-time fund managers often possess the most aligned incentives with their investors, she understood the significant value they bring to the venture capital landscape. However, Raida also understood the reluctance of family offices to commit capital to relatively unproven managers. By curating a portfolio of carefully selected funds, she aims to mitigate the perceived risk associated with investing in first-time managers while still accessing the high-growth potential of emerging ventures.

Amkan Ventures emerged to offer LPs access to emerging managers beyond their direct reach. Focusing on small Funds I and II led by ambitious managers with a conviction-driven approach, the firm prioritizes delivering returns and nurturing opportunities in the venture arena.

Amkan Ventures’ first close occurred in April 2024, with one investment already made in a $30M fund I out of NY and one more about to be announced.

Raida currently serves on the Selection Committees of RAISE Global and The Bridge Platform.

You can find Raida on her socials here:
LinkedIn: https://www.linkedin.com/in/raidadaouk/
Amkan Ventures: https://www.amkanventures.com/

And huge thanks to this episode’s sponsor, Alchemist Accelerator: https://alchemistaccelerator.com/superclusters

Listen to the episode on Apple Podcasts and Spotify. You can also watch the episode on YouTube here.

Brought to you by Alchemist Accelerator.

OUTLINE:

[00:00] Intro
[02:45] The impact of biology on Raida’s career
[06:24] If Raida were to teach a founder psychology course
[08:42] Raida’s definition of “running through walls”
[10:16] Similarities and differences between founders and fund managers
[11:36] What does GP-thesis fit look like?
[14:38] How Raida got to a yes on Nebular Ventures?
[20:35] The personas of different kinds of references
[26:05] The one question that Raida always asks during reference calls
[28:31] Is there such a thing as too many references?
[31:57] What if you don’t have a network of references as an LP?
[35:26] How does one set up the venture arm of a family office?
[40:28] What is the GCC?
[43:58] The best way to build relationships in the GCC
[47:54] The origin story of Amkan Ventures
[52:19] How did Raida build a strong understanding of the foodtech space?
[53:58] Where did Amkan’s name come from?
[58:26] What fund is in Raida’s anti-portfolio?
[1:00:30] What’s Raida’s take on solo GPs?
[1:03:10] How does your mindset change as an LP if you had evergreen capital?
[1:06:58] Thank you to Alchemist Accelerator for sponsoring!
[1:07:59] If you enjoyed this episode, it would mean a lot if you could share this with one other friend!

SELECT LINKS FROM THIS EPISODE:

SELECT QUOTES FROM THIS EPISODE:

“It’s always best to start the relationship when there is no ask.” – Raida Daouk

“The average length of a VC fund is double that of a typical American marriage. So VC splits – divorce – is much more likely than getting hit by a bus.” – Raida Daouk

“The more constraints you have, the more conviction you will have in each manager.” – Raida Daouk


Follow David Zhou for more Superclusters content:
For podcast show notes: https://cupofzhou.com/superclusters
Follow David Zhou’s blog: https://cupofzhou.com
Follow Superclusters on Twitter: https://twitter.com/SuperclustersLP
Follow Superclusters on TikTok: https://www.tiktok.com/@super.clusters
Follow Superclusters on Instagram: https://instagram.com/super.clusters